Many see the currency's price rising and rush to buy, or its price drops and they get scared. But...
Why does the price change in the first place?
There are 3 main reasons:
1. Supply and Demand
The more demand there is for the currency, the higher its price.
And the more people sell it, the lower its price becomes.
(Like anything in the market, from tomatoes to Bitcoin!)
2. News and Projects
If the currency project announces a big partnership or a new update... the price can skyrocket!
And if a problem or a negative decision occurs from the government... the price can collapse.
3. Market Sentiments
Fear and greed are what move the market quickly.
If people are scared, they sell. If they are excited, they buy.
My advice to you:
Before you buy or sell, ask yourself:
"Is there a real reason for this movement? Or am I acting without thinking?"
Question of the day:
Have you ever bought a currency just because you saw its price rising? What happened afterwards?
Share your experience!